Centerspace Reports 5.4% Revenue Growth but Faces $16.8 Million Net Loss in Q2 2025

Centerspace, a North Dakota-based real estate investment trust (REIT), reported its financial results for the second quarter of 2025, revealing a revenue increase of 5.4% to $68.5 million compared to $65.0 million in the same period last year. For the first half of 2025, total revenue reached $135.6 million, up from $129.5 million in the prior year. However, the company experienced a net loss of $16.8 million for the quarter, translating to a loss of $0.87 per diluted share, a significant decline from a loss of $1.7 million, or $0.19 per diluted share, in the same quarter of 2024. The net loss for the first half of 2025 was $21.0 million, compared to a loss of $6.5 million in the previous year.

The company’s financial performance was impacted by several factors, including increased property operating expenses, which rose to $26.5 million for the quarter, up from $25.2 million a year earlier. Notably, Centerspace recorded an impairment charge of $14.5 million related to five apartment communities that were reclassified as held for sale. This impairment significantly contributed to the overall net loss. Additionally, interest expenses increased by 14.9% to $10.7 million due to higher outstanding balances on lines of credit and increased mortgage interest.

In terms of strategic developments, Centerspace made its first acquisition in Salt Lake City, Utah, purchasing the Sugarmont apartment community for $149 million. This acquisition is part of the company's strategy to expand its portfolio, which now includes 72 apartment communities with a total of 13,353 homes. The company also classified 12 apartment communities as held for sale, reflecting a strategic shift in its asset management approach.

Operationally, Centerspace reported a weighted average occupancy rate of 94.5% across its properties, slightly down from 95.3% in the previous year. The same-store revenue increased by 2.7% for the quarter, driven by a 2.1% growth in average monthly revenue per occupied home. The company’s focus on enhancing resident satisfaction and retention through quality asset management remains a key component of its operational strategy.

Looking ahead, Centerspace aims to maintain its financial flexibility while navigating market conditions that include rising interest rates and inflationary pressures. The company has approximately $206.3 million in liquidity, including cash and available credit, which it plans to utilize for future acquisitions and capital improvements. Despite the challenges, Centerspace remains committed to its growth strategy and enhancing shareholder value through prudent management of its real estate portfolio.